Different Paths to Success—The Growth of the Electronics Sector in Ireland and Israel

Both Ireland and Israel have, over the last three decades, established internationally competitive electronics industries. Israeli electronics has its origins in locally initiated R&D, is dominated by indigenously owned firms, and has its main export-market strengths in the research-intensive leading-edge markets for telecommunications and medical diagnostic equipment. In contrast, large-scale, US-owned plants producing computer equipment and components dominate the Irish electronics sector. The authors explore the factors that have contributed to these very different development paths. Social and political factors are examined, along with differences in technology and industrial policy, and the availability and cost of suitably skilled labour. The suggestion is that Ireland retains some cost advantages for large-scale manufacturing operations whereas Israel provides a more attractive location for research-intensive activities or niche manufacturing. The experience of the two nations suggests important policy lessons for Israel if it is to capture more of the value added generated by the products it develops and for Ireland if it is to move towards more research-intensive electronics activities.